Intel Corporation (NASDAQ:INTC) announced its financial results for the third quarter of the fiscal year 2016 after the closing bell yesterday, October 18. It reported 80 cents in earnings per share, beating expectations by eight cents. The revenue came in a $15.8 billion, compared to the consensus estimate of $15.58 billion. Despite the earnings beat, shares declined about 5% in the market owing to a disappointing guidance by the company.

The better-than-expected results were characterized by growth in its strategic imperatives, such as cloud and data center, and improving PC demand. Revenue from these imperatives rose 9.7% year-over-year, whereas PC revenue increased 4.5% YoY. It observed a healthy adjusted gross margin of 64.8%, compared to the consensus estimate of 63%. In September, it increased its forecast first time in two years, citing improved PC demand and sending investors’ expectations higher.

For these results, Intel CEO Brian Krzanich commented, “It was an outstanding quarter, and we set a number of new records across the business.” It continued to align products and people with its strategy while delivering exciting new technologies. He also stated that the results showed its continuous transformation toward being a company that powers cloud and other smart, connected devices.

However, Reuters reported the company disappointed the Street analysts with its revenue forecast. It announced 4Q revenue guidance at $15.65-15.75 billion, compared to the consensus estimate of $15.86 billion. Executive Vice President Stacy Smith justified this prediction by stating that the company has given a below average seasonal increase for 4Q as it expects PC supply chain to compress its inventory globally. IDC research showed a decline in global PC shipments by 3.9% YoY for the quarter.

The Street analysts have given Intel a consensus price target of $40.68, showing its upward potential of 7.76% above the last close. Out of 39 analysts covering the stock, 22 rated Buy, three recommended Overweight, 11 favored Hold, one advocated Underweight, while two went for Sell.